Finance
Warren Buffett’s Berkshire Hathaway hikes SiriusXM stake to 32%
Warren Buffett walks the floor and meets with Berkshire Hathaway shareholders ahead of their annual meeting in Omaha, Nebraska on May 3rd, 2024.
David A. Grogan
Warren Buffett’s Berkshire Hathaway continued to increase its stake in SiriusXM, now owning 32% of the New York-based satellite radio company.
The Omaha-based conglomerate purchased roughly 3.6 million shares for about $87 million in separate transactions Wednesday through Friday, according to a filing with with the Securities and Exchange Commission late Friday.
Berkshire hiked its bet after billionaire John Malone’s Liberty Media completed its deal in early September to combine its tracking stocks with the rest of the audio entertainment company. It was part of Malone’s reshuffling of his sprawling media empire that also included a split-off of the Atlanta Braves baseball team into a separate, publicly traded company, which Berkshire also owns.
Buffett’s firm first bought Liberty Media’s trackers in 2016 and started piling into Siri’s tracking stocks in the beginning of 2024 after the deal announcement in a likely merger arbitrage play.
The 94-year-old has never mentioned the bet publicly, and it’s unclear if he’s behind it or if it’s the work of the billionaire’s investing lieutenants, either Ted Weschler or Todd Combs.
Not well loved
SiriusXM, which has been grappling with subscriber losses and unfavorable demographic shifts, is not a popular stock on Wall Street. Out of the 14 analysts covering the stock, only five gave it a buy rating, according to FactSet.
JPMorgan analyst Sebastiano Petti reopened coverage of SiriusXM with an underweight rating last week, citing concerns about the radio giant’s long-term growth and its ability to successfully target a broader demographic.
Meanwhile, the Liberty transaction, which reduced share count by 12%, could cause the company to pause share buybacks until 2027, which will likely weigh on shares, the analyst said.
SiriusXM
The stock popped 8% on Monday on Berkshire’s disclosure. However, shares are still down more than 50% this year.
The last time Berkshire invested significantly in a major media company was in 2022, when the conglomerate bought a nonvoting stake in Paramount Global‘s class B shares. The investment soured quickly. Buffett revealed in May this year that he had exited the entire stock at a big loss.
Buffett said the unfruitful Paramount bet made him think more deeply about what people prioritize in their leisure time. He previously said the streaming industry has too many players seeking viewer dollars, causing a stiff price war.
Money manager John Davi is positioning for challenges tied to President-elect Donald Trump’s tariff agenda.
Davi said he worries the new administration’s policies could be “very inflationary,” so he thinks it is important to choose investments carefully.
“Small-cap industrials make more sense than large-cap industrials,” the Astoria Portfolio Advisors CEO told CNBC’s “ETF Edge” this week.
Davi, who is also the firm’s chief investment officer, expects the red sweep will help push a pro-growth, pro-domestic policy agenda forward that will benefit small caps.
It appears Wall Street agrees so far. Since the presidential election, the Russell 2000 index, which tracks small-cap stocks, is up around 4% as of Friday’s close.
Davi, whose firm has $1.9 billion in assets under management, also likes staying domestic despite the tariff risks.
“We’re overweight the U.S. I think that’s the right playbook in the next few years until the midterms,” added Davi. “We have two years of where he [Trump] can control a lot of the narrative.”
But Davi plans to stay away from fixed income due to challenges tied to the growing budget deficit.
“Be careful if you own bonds for sure,” said Davi.
Since the election, the benchmark 10-year Treasury yield is up 3% as of Friday’s close.
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